Motoo Nishihara, Chief Technology Officer (CTO) of NEC, can often be heard emphasizing his aim to transform NEC into a company capable of leveraging technologies to hybridize its business models. We asked Nishihara, who is working tirelessly to get the word out about the need to accelerate this "hybridization," to tell us about NEC's latest technology vision and strategy. With the Nobel Prizes in Physics and Chemistry both awarded in the AI field in 2024, what potential is there for NEC's research and development going forward?

Drawing on experience to drive R&D

──What has led you to where you are today?

I didn't start off in a research laboratory, but rather as an equipment development engineer in what was then the Network Division, which handled hardware, software, and systems. I was assigned a major project in my mid-twenties, and stayed extremely busy dealing with bugs and other tasks. This is how I learned the basics of technology and business. Another milestone for me was when I decided to apply for an in-house program through which I went to the United States to study computer engineering and obtained my master's degree.

Since the division to which I had previously belonged no longer existed when I returned to Japan, I was put in charge of new business development. I conducted marketing and customer interviews on my own to find domains where we could sell our products. I even received the Advanced Technology Award for a security-related product targeted at data centers, which led to me being transferred to NEC Central Research Laboratories. At the time, it was rare to find someone with a background like mine.

──You were appointed CTO in 2018. What changes have you witnessed in research and business since then?

A CTO must be an objective expert on technology who is capable of not only hammering out plans for investing money and investing in people but also linking technologies with business.

That's why I'm also working closely with individual organizations and HR. Of NEC's seven research laboratories worldwide, I am reviewing our priority areas together with our research laboratories in Japan, North America, and Europe. For example, while NEC Laboratories Europe once engaged solely in network research, it is now a key R&D base for AI, including AI-based drug discovery. NEC Laboratories America has also completely shifted to commercialization-oriented activities and is proactively involved in business in North America.

Even our domestic research laboratories have transformed their culture into one in which they now carefully consider how to work hand in hand with our business segments. In addition, ever since NEC's Data Science Research Laboratories moved to the same organization as one of our new business divisions, it has started making some remarkable contributions, including the commercialization of NEC's generative AI "NEC cotomi" and consulting by researchers. Meanwhile, I have spearheaded the establishment of two new research laboratories—NEC Laboratories India and the Israeli Research Center.

While the NEC R&D's journey is only halfway to its goal, the distance between technology and business, which was far greater when I was first appointed CTO, has grown closer. We now hold exhibitions showcasing our R&D results, which were once only held internally, and share our Technology Vision—that is, our R&D guidelines—with those outside our company. I also have more opportunities to accompany members of our R&D divisions when they engage in discussions with customers. Since NEC's business divisions had by far less interaction with research laboratories in the past, I have been told that they can't believe how different things are now.

In addition to being a guideline for research, our Technology Vision is at the core of our discussions with customers

──The latest Technology Vision was announced at NEC Innovation Day 2024, which is an information session on NEC's R&D and new business strategies.

Our Technology Vision is a guideline for making sound decisions when investing in technology. While we don't want to be left behind in terms of recent technological advancements, we do need guidelines for accurately assessing the potential of technologies to prevent excessive trend-driven investment.

While the autonomy of researchers is important, researchers should not take action simply because they think something sounds interesting. It is also imperative for them to be focused on the same goal of achieving NEC's Purpose, which is to "create the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential." That's why we set out to create this Technology Vision by engaging in discussions with experts outside the company and consulting with talented researchers working for the NEC Group to play a central role. In addition, our Technology Vision is at the core of our discussions with customers, through which we often receive valuable feedback.

I believe there is potential for innovation that only occurs once every hundred years in the areas of generative AI, Quantum computing technology, space technology, and life science. NEC, which is involved in all four of these areas, must remain even more level-headed than it already is. Our Technology Vision plays an incredibly important role from this perspective as well.

──In the realm of generative AI, Agentic AI have become a hot topic around the globe.

As intelligent entities with the potential to replace humans, Agentic AI are the next evolution in generative AI. The catch, however, is that they also come with the risk of hallucinations—that is, the generation of inaccurate or misleading information presented as being true. Despite having an excellent memory and strong processing capabilities, they do answer incorrectly from time to time. But in a world where you can create an "AI worker" capable of working around the clock, or even as many as 10 or 100 such workers by simply adding more servers, professionals in specific occupations will need to think about how they can use Agentic AI in their own industries.

It is imperative that business experts rather than technology experts consider how to use Agentic AI, and this is a theme with tremendous potential for the NEC Group, which can leverage its strength in NEC cotomi—the lightwait generative AI with advanced Japanese language capabilities developed by NEC—and its collaborative relationships with companies in a wide range of industries.

Putting our underlying strengths in R&D to use in innovation strategies

──How do you plan to build on NEC's strengths in the future?

Although there are several highly selective international conferences for which it is difficult to pass the research paper review process, NEC has ranked among the top 10 companies* in the world for the number of papers accepted at such conferences in the fields of AI and machine learning over the past 20 years. In fact, NEC is the only Japanese company to consistently rank in the top 10. In addition, NEC possesses the largest number of patents in the world in certain areas of biometrics, image recognition, and analytical processing.

NEC has also been bolstering its efforts to develop new businesses with the establishment of NEC X in North America in 2018 and the domestic launch of BIRD INITIATIVE in 2020. NEC X is an initiative for creating start-ups by harnessing NEC's technologies that has led to the establishment of 20 new businesses over the past six years. While the business itself is small in scale, the seeds are being planted.

Startup management teams and activity funding are sourced externally, and NEC receives part of the startup's capital and licensing fees for technology use in return for the provision of technology. In this way, if the number of successful startups increases, NEC will have a continuous stream of intellectual property licensing fees coming in.

For a systems technology company like NEC whose livelihood depends on system integration, it is rare to achieve business success based solely on technology seeds. This is why it is vital to not rely on technology alone but rather ensure that you have one or two additional pillars of strength. Although you can only incrementally expand value with one pillar of strength, defining different pillars of strength makes it possible to expand the area of value multidimensionally.

I would also like to mention another pillar, our business models. To nurture business models that leverage technology, it is crucial for us to not only identify the needs of our customers today but also consider the needs of our future customers, along with the technological potential at that time. This is another reason it is important for us to have a technology vision.

As a company, I want us to get to the point where people say, "NEC's technologies are outstanding, but so are its business models." To promote digital transformation (DX) for our customers and create new value for society, we will continue leveraging technologies to hybridize our business models.

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